The View from Calhoun County

PJM Capacity Results Coming Soon

If you want to learn more about PJM’s capacity auctions, here is a good story from Reuters about the auction results that will be released after this year’s auctions close on Friday.

This is an important date for people following the PATH zombie. Remember when PATH tried the unsuccessful “60 days after whenever” game on the National Park Service? Here’s what they told the NPS:

As indicated by the PJM Staff report, additional analysis will be undertaken after completion of the May 2012 forward capacity auction results. The time required by PJM Staff to perform such analysis thereafter is not yet known. [emphasis added]

PJM will make a recommendation about PATH to its board of managers in June or July. It will make its recommendation based on information gleaned in the first part of the year about planned generation construction and retirements and about consumer commitments to reduce demand during peak periods.

Note that Herling says that PJM will make its final decision on PATH’s fate in “June or July,” in other words, after the May capacity auction results are released.

Remember that one of PJM’s original arguments for PATH was that capacity prices in eastern PJM were much higher than prices in western PJM. They didn’t say it out loud, but this was the real reason for Project Mountaineer and PATH — to increase the profits of power generators in western PJM and also to raise electric rates in Michigan, Illinois, Indiana, Ohio and West Virginia by sending more of their power to East Coast states.

If that trend continues at this year’s auction, it is quite likely that PJM will pull the plug on PATH, at least that is the latest Kremlinology hint from PJM headquarters at Valley Forge. We’ll be looking for the PJM press release on this years auction results.

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It was the best of times, it was the worst of times, and once upon a time there were two companies who were making many bags of gold by manufacturing a product that poisoned the townsfolk. Good King EPA pondered this for a very long time and eventually issued an edict that the companies must stop poisoning people with their manufacturing process. One of the companies, ruled by the evil, but slightly senile, despot Mikey, had a big, bad tantrum and whined that it was impossible to change, paying many bags of the company’s own gold to try to influence King EPA to change his mind. The King waivered, but the edict held.

The other company, ruled by gap-toothed, snake-oil salesman Tony the Trickster, took a different path. Tony the Trickster’s coin-counters instead found opportunity in King EPA’s edict that would fill Tony the Trickster’s coffers. Tony the Trickster didn’t complain or try to change King EPA’s mind. He immediately announced plans to stop some of his manufacturing altogether, causing a shortage that would make life uncomfortable in the kingdom. The Court Jester found this to be unacceptable, so he promised Tony the Trickster many bags of the townsfolks’ gold to continue to keep some of his facilities open temporarily while Tony the Trickster’s company built new roads (again with the townsfolks’ gold) to some of his other facilities unaffected by the edict. This also increased prices that the townsfolk paid at the company’s unaffected facilities that were in compliance with King EPA’s edict.

Tony the Trickster got very rich. Mikey the despot donned the golden parachute he had been polishing for years and retired to ride his tug boat up and down the big river while his company crumbled from neglect.